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The client intended to purchase a group of companies, but low quality of their accounting and management systems hindered the assessment of cash flow stability. Moreover, significant fluctuations of the working capital made the calculation of a stable level of the working capital more complicated in determining the adjustment of the transaction price.

Solution

KPMG performed due diligence, the scope of which was in total compliance with the client’s objectives and was adequate to solve the issues identified during the target performance analysis.

KPMG team comprised specialists from relevant industries in Russia, who have deep knowledge of specific business aspects of Russian dealers, and KPMG specialists from a local Asian office who facilitated communication with Asian investors, which was of special importance given different ways of thinking, culture and business standards.

Result

We assisted in building a financial model of dealership centers and provided professional support in negotiating with the sellers of car dealer centers helping a deal to go through.

Why KPMG

Our main advantage is our international coverage that helps building a well-balanced team of specialists who have knowledge and understanding of the client’s specific business aspects in any country, and local contexts. This advantage is ensured through the use of common high standards of quality at all KPMG member firms.

Improving the management reporting preparation processes for dealers

Client

An international car holding company

Problem

The company faced the problem of a low quality of the management reporting provided by dealers and non-compliance of dealers’ reports with the guidelines of the company.

Solution

KPMG specialists analyzed the guidelines on the preparation of management reporting by dealers, developed the methods of checking their reporting and statements for compliance with the guidelines and actual business aspects and performed in-depth analysis of financial and operational data of the dealers for a specific period based on developed methods.

This solution allowed us to identify main mistakes made by the dealers when preparing reporting and statements and their key causes, which, in its turn, helped determine areas most susceptible to misstatements, the materiality level of misstatements and fundamental deficiencies of the internal control systems of dealers.

At the end of the project, KPMG together with the client held a dealers workshop on the importance of high quality management reporting and gave answers to methodological questions from dealers on using the guidelines, preparing quality management reporting and building controlling functions.

Result

The management of the company received a report on each dealer with benchmarking analysis of every group of dealers in general including a detailed description of the types and causes of mistakes and errors, a list of defects of the control environment and recommendations on elimination of identified mistakes. In addition, KPMG prepared a list of recommendations to improve the guidelines of the company and optimize the process of preparing management reporting by dealers.

Thus, the services provided by KPMG helped improve the quality and transparency of the dealer management reporting used by the client’s management for strategic decision making. KPMG team also developed an action plan for the implementation and further development of the program aimed to optimize the process of preparing the management reporting by dealers.

Why KPMG

We use our expertise and experience to offer our clients the most advanced solutions in accounting and reporting, and deliver comprehensive “turnkey” projects.